Trump said he will place a tariff on $300 billion of Chinese goods coming into the US. That just about covers all Chinese goods coming into the US.
The new tariffs could hit US consumers harder than the earlier rounds. It would tax goods like iPhones and other consumer electronics, sneakers, and toys. Last year, Trump imposed tariffs on about $250 billion in Chinese-made goods, targeting industrial materials and components. “We’re taking in many billions of dollars. There’s been absolutely no inflation and frankly, it hasn’t cost our consumer anything. It cost China,” Trump said in his remarks, adding that companies are now moving out of China to avoid the tariffs. I am not sure how we can avoid being hurt in this. It would appear prices will go up on a whole lot of items.
In fact, economic studies show that US consumers, not China or other foreign importers, are bearing the weight of the duties. The White House’s most recent Economic Report of the President, released in March, acknowledged that any benefit from the tariffs is offset by “costs paid by consumers in the form of higher prices and reduced consumption.”Trump issued his new threat of tariffs on China following a mid-morning meeting in the Oval Office with his trade team meant to update him on talks that wrapped this week in Shanghai, according to an administration official familiar with the matter. It appears we are being handed a bill of goods to suggest we will not be harmed in some fashion by the tariffs. Trump was upset that the Chinese did not promise to buy agricultural goods from the US. I guess they were not in the mood to make such a promise. Trump was under the impression that a promise had been made by the Chinese, apparently, he misunderstood. One would assume, after suggesting a $300 billion tariff on your goods it does not place you in the mood to be generous and buy goods from the country that has just nailed you to the wall. Has nothing to do with whether I agree or not. Just fact.
Trade officials told Trump there is still room for an agreement to be reached, and at the same time stated they were far from an amicable agreement. In addition to the failure of the Chinese to buy agricultural goods from the US, they have failed to stem the sales of Fentanyl into the US.
Farmers have been hit hard by China’s retaliatory tariffs. The Chines were the biggest market for soybeans but they stopped buying them and the amount of soybeans in storage has hit record levels. 24 hours ago things appeared to be going well but now things are not going well at all. Businesses and Wall Street are showing increased anxiety with the failure of bringing the trade war to an end. Equity and oil took a downward turn, no surprise, there is concern that it will drive the Chinese further away from a resolution.
About 85% of the toys sold in the United States come from China and would be hit by the new tariff. In June, Hasbro President John Frascotti told US trade officials at a hearing that the duty would cause “significant and disproportionate harm” to the company and the broader US toy industry. I am surprised and at the same time, not surprised about all the toys being made in China. Disturbing.
Tariffs go into effect on September 1, and there is concern that orders for toys have already been placed for the Christmas season. A lot of things are going to get more expensive, and of course, the increase is passed onto the consumer, and toys are not essential goods.
The humor I found in this was stated by the president of the U.S. – China business Council, Craig Allen, when told Thursday that things had taken a big turn for the worse from Monday’s optimistic view that things were progressing in a positive fashion, and he said he thought it was counterproductive. Gee, ya think
CNN’s Cristina Alesci, Donna Borak and Maegan Vazquez contributed to this report.